South Eastern Coalfields Ltd (SECL) has witnessed a strong growth for coal sales under spot auction held on 5 Jan ’21, thus reflecting demand revival in the open market.
Although, sales improved on the back of economic activities coming back to near normalcy, the company enjoyed higher profit with the introduction of amendments in auction schemes by garnering fiscal-high premium of 48% over notified price in Jan ’21 which was also the same comparable to that attained in the year-ago month.
Notably, price hike was partly supported by the recent revision came into place which necessitates bidders to quote bids in increment of INR 20/t for spot auctions open for all sorts of coal buyers .
The performance was also better in terms of coal allocation, where out of 963,000 t offered, booking of 66% volume accounting to 636,650 t was registered. In contrast, the previous month’s auction had failed to allocate even half of the coal volume that was put up for sale.
Uptick in domestic coal demand:
Despite weaker fundamentals for global coal prices, port-side offers for South African coal have not shown any significant downward movement, which is currently assessed at INR 6000/t ex-Gangavaram for RB2 grade. Consequently, domestic buyers in Central India have increased their appetite for coal in the spot auctions.
Bid price of INR 3132/t for G8 coal from Rehar colliery gained highest premium of INR 1011/t, which was almost INR 100/t higher than that assessed in the previous month. (Detailed source-wise result can be seen here).
Nevertheless, there was selective preference for coal offered from a particular location as the same grade from Kanchan colliery was procured at INR 2353/t.
Similarly, for G9 grade, Bijari colliery fetched bid premium of INR 857/t over reserve price, while no bids were recorded for Baroud colliery.
Overall, better response was seen for high GCV coal, where apart from two collieries comprising coal up to G11 grade, entire volume was booked from the remaining lot. On the other hand, coal below this band-tier received lukewarm response which was booked almost at the reserve price.
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